My instant reaction to Tim Geithner's embarrassment over his taxes was that it would not stop the appointment going forward, but I am beginning to wonder. The hostile editorial in the NYT certainly did not help.
As much as Mr. Obama and his team may wish it, however, the disclosures cannot be dismissed so easily, or papered over. The just-the-facts report of Mr. Geithner's tax transgressions, compiled and released by the Senate Finance Committee, paints a picture of noncompliance that is considerably more disturbing than his supporters are acknowledging...
Many people find taxes baffling, but before his job at the I.M.F, Mr. Geithner was a senior official in the Treasury Department under President Clinton, and for the past five years he has been the president of the Federal Reserve Bank of New York. With that professional profile, tax transgressions are tough to excuse.
My guess had been that Geithner would in the end be given a pass. I had supposed he made an honest mistake, and the bafflement quotient is not to be denied, such is the complexity of the system. (As the Times points out, an aggravating factor in this case was an error over "wrongly claimed expenses for sleep-away camps in calculating his dependent care tax credit". Is there a correct way to claim such expenses? What are sleep-away camps, by the way? Is there such a thing as sleep-at-home camp, even if only as a tax loophole?) But the fuss is not dying down. Geithner continues to be cruelly mocked by the television comedians--and make no mistake, they are a political force to be reckoned with.
Suppose nonetheless that he is confirmed. Even then, this little scandal worsens a problem I've mentioned before: lack of clarity over economic-policy leadership. It may be possible to devise good policy by committee, but I doubt that it is possible to explain it adequately unless you have a principal, credible spokesman. Who is that supposed to be? For the time being, presumably not the man everyone is laughing at, even if he does become Treasury Secretary. If the matter is resolved as the Obama team would wish, it still serves to subordinate (further subordinate?) Geithner to Larry Summers in the White House. Or perhaps not. As I say, lack of clarity is the issue.
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